AN ETHICAL DILEMMA
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An ethical dilemma associated with globalization
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An ethical dilemma associated with globalization
Appropriate ethical behavior is a necessary aspect of all business organizations.
Businesses which do not operate in an ethical manner run the risk of not only damaging their
own reputations; they run the risk of harming their employees, stockholders and the customers
and clients they serve. Business organizations which operate in a strictly domestic manner have
particular problems which must be dealt with according to rules and regulations as set forth by
the United States government however; when these business make the decision to operate
internationally, they are most oftentimes confronted with regulations they may not have taken
into consideration before deciding to go global. Perceptions of ethical business behavior vary to
a great degree across cultures and this is a factor which cannot be ignored by the business leaders
and employees of multinational corporations.
A prominent historical example of an ethical dilemma associated with an organization’s
decision to operate globally is that of the disaster which occurred at the Bhopal chemical plant in
1984. Dow Chemical Corporation, formerly Union Carbide, opened a chemical plant in Bhopal,
India in order to take advantage of reduced cost of labor, lower costs to remain in operation and
access to overseas markets which would not be possible if they were to operate domestically.
“On the night of December 23, 1984, a dangerous chemical reaction occurred in the Union
Carbide factory when a large amount of water got into the MIC storage tank # 610. The leak was
first detected by workers about 11:30 p.m. when their eyes began to tear and burn. They
informed their supervisor who failed to take action until it was too late” (TED case studies,
1997).
Because of the extent of the chemical reaction, many lives were lost and numerous
employees who were present in the plant at the time of the disaster as well as innocent citizens,
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who lived in the vicinity of the disaster, are now forced to live with physical disabilities. Union
Carbide executives in the United States have been accused of ignoring problems associated with
their facility in Bhopal because of the more lenient business laws and regulations in India; even
though they knew there were problems which could be potentially hazardous, they did nothing to
fix the problems because the Indian government did not pressure them to do so. “…they built it
in order to retain control, they used untried technology to keep control, they under-funded it to
keep control. When it turned Bhopal into a gas chamber, they said they'd had no control”
(Ortman, 2008).
Even though it is extremely difficult to understand why a company would allow this type
of horrific incident to take place, sadly, greed and a blatant disregard for human life are at the
forefront of the causes. On American soil the Union Carbide facilities were well taken care of,
employees were satisfied with their work environment and ethical issues were basically nonexistent. Individuals in upper management and top executives knew that in order to remain in
business they were required to follow federal and state regulations pertaining to the proper
operation of their facilities.
The Former chief executive officer of Union Carbide during the time of the disaster has
never been tried or formally charged with any wrongdoings even though the Indian people feel
very strongly to this day that he should be extradited to India in order to undergo hearings which
would most likely, ultimately send him to prison for his lack of ethical standards in regards to the
functioning of the Bhopal plant. While the people of India believed, and still believe, that the
American Union Carbide executives should have been help responsible and accountable for their
actions, a good number of past and present Union Carbide (Dow) workers believe that the
accident occurred due to the refusal of Indian executives to rectify obvious problems. So in short;
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the difference in ethical beliefs across the two cultures has created a stalemate in which neither
side has accomplished what they believe to be right.
The consequences of the actions taken by the American Union Carbide executives are
apparent. Their failure to run their facility in India with the same ethical standards of business
they applied to their facilities in America was devastating and caused thousands of individuals to
unnecessarily lose their lives. Even to this day, the citizens of India are protesting the actions or
lack thereof, of the corporation; they want them to admit to their mistakes and justly compensate
the victims and their families. “Indians have reacted with fury to President Barack Obama's
tough stance against BP, accusing the US of double standards over industrial accidents after the
failure to convict Americans involved in the Bhopal disaster of 1984 or to obtain what many
view as adequate compensation for victims” (Burke, 2010).
The risks taken by the American-based company can in no way be justified. The people
of India who were employed with the company basically had no choice in the matter due to the
fact that no one would listen to their pleas to make the necessary changes and improve safetymeasures in the plant. Even though the wages the employees were being paid were far below
average, they were happy to have the opportunity to work and so they continued to toil in an
environment which they knew was dangerous. The Indian people have extremely high ethical
standards in regards to fulfilling their duties and remaining committed to their agreements; the
individuals who were in charge of Union Carbide at the time would have been able to learn a
great deal from the workers they chose to ignore and ultimately kill.
In conclusion, appropriate ethical behavior and actions in the world of business are not
only important for domestically-run organizations; they are a vital component of businesses
which intend to operate on a global basis. The same rules should be adhered to regardless of
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where a business operates even though certain adjustments to specific cultural beliefs may be
necessary. Allowing individuals to work in unsuitable and dangerous conditions cannot be
regarded as ethically appropriate in any nation by any person, especially when the only reason
for these actions is to allow the rich to become richer and to evade the regulations which have
been established by the organization’s homeland.
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References
Burke, J. (2010, June 23). India fury over US double standards over BP and Bhopal. Guaradian.
Retrieved November 14, 2010, from
www.guardian.co.uk/environment/2010/jun/23/india-barack-obama-bhopal
Ortman, S. (2008, November 12). Quotes. Students for Bhopal * International Campaign for
Justice in Bhopal. Retrieved November 14, 2010, from
http://old.studentsforbhopal.org/Quotes.htm
TED case studies. (1997, January 11). Bhopal Disaster. American Edu. Retrieved November 14,
2010, from http://www1.american.edu/ted/bhopal.htm